MCLC: luxury stories cater to Chinese shoppers

[Denton, Kirk]

MCLC LIST
From: kirk (denton.2 at osu.edu)
Subject: luxury stores cater to Chinese shoppers
***********************************************************

Source: NYT (4/14/12):
http://www.nytimes.com/2012/04/15/business/global/american-brands-seek-favo
r-with-wealthy-chinese-tourists.html

Luxury Stores Pull Out Mandarin Phrase Books to Make the Sale
By STEPHANIE CLIFFORD

Over five days in January, a group of visitors to New York was treated to
a private concert with the pianist Lang Lang at the Montblanc store,
cocktails and a fashion show attended by the designers Oscar de la Renta
and Diane Von Furstenberg, and a tour of Estée Lauder¹s original office.

They were not celebrities. They were not government officials. They were
Chinese tourists with a lot of money.

Though luxury brands started opening stores in Beijing and Shanghai years
ago, Chinese shoppers still spend more on luxury products abroad than they
do at home, according to the consulting firm Frost & Sullivan. Price is
the major reason: Because of China¹s taxes, luxury products are about a
third cheaper in the United States and elsewhere.

European luxury stores have been catering to Chinese tourists for years.
Now high-end retailers in the United States are pulling out their Mandarin
phrase books and trying to convince Chinese visitors that Americans can do
luxury, too.

³What started as a trickle has now become a flow,² said the vice president
of the antiques store Macklowe Gallery, Ben Macklowe, who recently sold a
Tiffany lamp that cost in the low six figures to a Shanghai visitor.
³There¹s been prosperity across so much of Asia that you¹re starting to
see it much more in the profile of the tourist on Madison Avenue.²

A record number of Chinese visited the United States last year ‹ nearly
1.1 million ‹ and the country accounts for one of the top-growing tourist
groups here, according to
<http://www.tinet.ita.doc.gov/outreachpages/download_data_table/2011_Visita
tion_Report.pdf>the Commerce Department. The number of visitors is
expected to almost double by 2014, according to the U.S. Travel
Association. Chinese visitors spend about $6,000 each on every visit here,
versus the $4,000 that visitors from other countries spend on average, the
association says, and their top activity is shopping.

Although some tourists spend money on Disney trinkets and at the outlet
malls they have traditionally frequented, luxury brand purchases are
surging in part because American stores carry a broader range of products
than their counterparts in China, said Julia Zhu, consulting director for
Frost & Sullivan.

Tiffany, which made almost a quarter of its United States revenue last
year from foreign tourists, has added Mandarin-speaking sales staff to its
major stores, as has Burberry, where more than half of sales at its
flagship stores are to tourists. Representatives from Tourneau¹s Manhattan
office recently accompanied New York City officials on a visit to China to
encourage more tourism in the city.

At its United States stores, Montblanc sells Year of the Dragon pens and
has staff members who speak Mandarin and Cantonese. It is also printing
Chinese-language brochures about its products and selling wallets sized
for Chinese currency.

Despite having more than 100 stores in China, Montblanc is going after
Chinese shoppers on vacation abroad. ³Yes, we are in the major cities, but
when you travel, you¹re in the mood to enjoy and experience the moment,²
said Jan-Patrick Schmitz, chief executive of Montblanc North America. ³We
certainly will do more and more marketing toward them.²

Retailers in the United States lag behind other countries. Part of that is
because of visa issues; it is easier for Chinese residents to get visas to
Europe. High-end American retailers like Saks Fifth Avenue and
Bloomingdale¹s are urging the government to speed up the process here.
President Obama said in January
<http://iipdigital.usembassy.gov/st/english/article/2012/01/20120119154622e
iznekcam3.863162e-02.html#axzz1rxE4UPcN> that he planned to increase
visa-processing capacity from emerging markets like China and Brazil by 40
percent this year.
The American stores also have to overcome an idea that luxury can come
only from the old world.

³The European brands, they see prestige, history, heritage,² said Sunny
Wong, group managing director of Trinity, a company that owns and operates
high-end European retail brands in China. American brands, by contrast,
are seen as ³contemporary, lifestyle² rather than pure luxury, he said.

American retailers are racing to prove Mr. Wong wrong.

Bergdorf Goodman in January held a private runway show at its Fifth Avenue
store for a group of Chinese tourists, followed by a meet-and-mingle with
designers like Mr. De la Renta, Peter Som and Zac Posen. Then, with
Bergdorf¹s fashion director looking on, Mandarin-speaking assistants
helped the Chinese customers shop throughout the store.

³There are lots of brands that are already very well-known in China, but
Bergdorf¹s strongest footprint is in New York, so getting them to know
that brand when they come here is a very important goal for us,² said
Chris Noble, president of Affinity China, a luxury travel operator that
organized the event.

Affinity China also arranged a meeting with Aerin Lauder, a granddaughter
of Estée, and a tour of J. Mendel, the fur brand, with a designer and one
of the Mendels. ³They took them backstage, and showed how materials are
selected and how the pieces come together, and showed them the craft,² Mr.
Noble said. ³We¹ve got a lot of interest in the craftsmanship behind the
luxury pieces. People like to be able to say, ŒI saw how this was made, I
met the designer.¹ ²

Mr. Macklowe, the gallery executive, recently held a seminar with
Champagne and chocolate for Chinese tour operators.

³You have to tailor your message for the crowd, and for this crowd it was,
ŒThese are very exclusive things, these are very authentic things, these
are very high-end things that you can recommend to your clients without
reservation,¹ ² he said. ³We tried to give them a sense that what we do
only exists in one place on earth.²